Auditing Derivative Instruments, Hedging Activities, and Investments in Securities -- AICPA Audit Guide

This guide summarizes new standards, guidance, and practices, and delivers "how-to" advice for handling audit and accounting issues affecting derivative instruments, hedging activities, and investments in securities.

Updated as of June 1, 2010, the guide includes relevant guidance contained in applicable standards and other technical sources. Whether you are a financial statement preparer or auditor, it is critical to understand the complexities of derivative instruments and securities, coupled with sometimes equally complex accounting guidance. This guide includes:
· an overview of derivatives and securities, including examples of common derivatives and common hedging strategies.
· auditing fair value measurement and disclosures.
· applying the guidance in AU section 332, Auditing Derivative Instruments, Hedging Activities, and Investments in Securities (AICPA, Professional Standards, vol. 1).
· accounting guidance for derivatives and securities.
· the three elements of the audit risk model.
· comprehensive examples and case studies.

The guide offers clear and practical guidance on recent developments in areas such as risk assessment, fair value measurements, and internal controls. All content is reviewed by subject matter experts and approved by the appropriate AICPA senior technical committee(s).

Updates include technical guidance contained in:
· FASB Accounting Standards Update (ASU) No. 2009-05, Fair Value Measurements and Disclosures (Topic 820) - Measuring Liabilities at Fair Value
· FASB ASU 2009-12, Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)
· FASB FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (FASB ASC 320-10-35)
· Statement on Auditing Standards No. 115, Communicating Internal Control Related Matters Identified in an Audit